(REUTERS) - Corning Inc said it would buy out Samsung Display’s stake in their LCD glass joint venture in a deal that could see the Samsung Electronics Co Ltd subsidiary take a 7.4 per cent share in the Gorilla Glass maker.
The deal includes a new 10-year LCD display glass supply agreement between Corning and Samsung Display – which makes LCD panels for tablets and televisions – that will add about US$2 billion (S$2.5 billion) to Corning’s annual sales.
Corning shares jumped more than 20 per cent to US$18.51 in extended trading on Tuesday.
Samsung will receive convertible preferred shares with a face value of US$1.9 billion and will make an additional US$400 million investment in Corning by subscribing to new convertible preferred shares.
If the preferred shares are converted, Samsung would get a 7.4 per cent stake in Corning. Based on Corning's closing share price on Tuesday, the holding would be worth about US$1.7 billion.
Samsung currently owns 43 per cent of the joint venture, Samsung Corning Precision Materials Co Ltd, formed in 1995.
The joint venture makes active matrix LCD glass used in television sets, notebook computers, desktop monitors, digital cameras and mobile phones.
Corning also reported preliminary results that were in line with market estimates. Full results will be announced on Oct 30.